It is believed that Sega of Japan began planning for a 32-bit console in the early 1990s with plans drawn up in 1992. The main console plan that can be directly related to the final outcome was the Sega Giga Drive. This name was given to it as a wordplay on the Sega Mega Drive, implying that this new console is more powerful.
The Giga Drive was Sega's first dedicated CD-ROM based console (not like Mega CD which was an add-on for Mega Drive). It was also their first dedicated 32-bit console (not like the 32X which was also an add-on for Mega Drive). The Giga Drive was developed by Hideki Sato and his team of engineers. It was being designed around 1992-1993 to be superior to the 3DO Interactive Multiplayer. It is believed that prototypes were made during 1993. Also at this time, the name was changed to Sega Saturn, named after the planet like other Sega projects (The "Planet Projects").
The Saturn that eventually made it to the market in 1995 was different to the one conceived in 1993. It was originally going to be the ultimate 2D console with 3D capabilities being a possibility. Sega's Virtua Fighter arcade game had become very popular and gamers hoped that Sega would have 3D capabilities in their new console so that Virtua Fighter could be ported for play on it. In November 1993, Sony announced their entry into the console market with the PlayStation under development. These factors, mainly the latter, are what made Sega change the specs of their system to become the more powerful console we know today.
After seeing the specs of the PlayStation, Hayao Nakayama ordered for the Saturn's specs to be fixed so it would have more processing power for 32-bit 3D games to compete with Sony's console (which was due for release at the same time as the Saturn - November 1994). This had to be done in under one year, but was successfully achieved. In the end, Sega had used technology from both their 2D and 3D arcade boards and dual processors. But this would be a problem for programmers. Programming for 2 processors would be difficult. Few programmers found it easy to program for the Saturn in this way and so most used C programming language, thus these games do not use the full power of the Saturn.
The Saturn was officially released in Japan on November 22nd 1994 for ¥44800 (US$490). Over 250 000 consoles were ready for sale, all of which sold in 2 days. Sony's PlayStation was released a week later on 2nd December but over the first six months of release, Saturn still outsold the PlayStation. Unfortunately, this would not last long. Lack of software for the Saturn due to production delays meant that the PlayStation soon took over.
The Sega Saturn's unexpected US debut was at 1995's E3 Trade Show on May 11th 1995 for US$399. The official release was planned for 2nd September but Sega wanted to release their console first to beat the PlayStation (This mistake was repeated with the Dreamcast). Also at E3, Sony announced their console which was due for release later in the year for US$299. This was bad news for Sega.
The people who bought the Saturn were only able to purchase Virtua Fighter upon release. Between 11th May and 2nd September, only one or two more games were released for the Saturn. Game developers could not finish their games in time for the early release of the Saturn. Some developers rushed out their games, which left the Saturn with a bad reputation (note how many games were re-released in the full version later down the track). The early release also meant that there was no time for proper advertising for the console. Within the first year of release, though, Nintendo, Sony and Sega each had about 33% share in the video game market. But the PlayStation soon took over after the release of Final Fantasy VII.
Many argue that the PlayStation is superior to the Saturn. While the PlayStation supported several hardware features that the Saturn didn't, the Saturn is capable of handling more polygons and has a larger texture memory. The Saturn is also the best 2D console ever released. While it is considered a 3D console, it was also made to support 2D games (like you would see on 8-bit and 16-bit consoles) and the 2D games released show Saturn's excellent sprite-handling abilities. This is because Sega used technology from their 2D arcade boards as well as their 3D boards.
The Saturn, like other Sega consoles, had the potential to be bigger than what it was, but due to problems with the console itself and the way it was marketed, the PlayStation soon took over as it was seen as being far superior and had a lot of third party support. Saturn was supported in the US until 1998 and in Japan until 1999.
Information on this page has been sourced from Console Database